Snyder casino refusal linked to Marquette-area gas station

June 21, 2013

MARQUETTE - In exchange for approving the proposed relocation of a local tribal casino, Gov. Rick Snyder asked the Keweenaw Bay Indian Community to alter plans to construct a new gas station in Marquette County, according to a letter sent from his office this week.

The letter, signed by the governor's deputy legal counsel and addressed to the U.S. Department of Interior, provides justification for Snyder's rejection of the KBIC proposal to relocate its Ojibwa II Casino from Chocolay Township to the site of the former Marquette County Airport in Negaunee Township.

The letter states that Snyder attempted to enter into negotiations with the tribe, looking to "reach an agreement that would benefit the tribe, the local community, and the state."

Issues Snyder hoped to address with the KBIC included a request that the tribe consider not taking property along U.S. 41 into trust for the purpose of selling tax-free gasoline. The tribe currently operates The Pines Convenience Center, a tax-free gasoline station in Baraga, and the KBIC announced last year it is looking to construct a second station in Marquette Township along U.S. 41.

A January letter sent by Snyder's legal counsel to the Bureau of Indian Affairs Michigan Agency stated that the gas station may be "unlawful" and could provide "an unfair commercial advantage over surrounding competitors."

Snyder's letter also stated he made additional requests of the tribe, telling the KBIC he would consider approving the casino relocation as a part of a larger bargain.

The proposed deal would have included a requirement that tribal businesses levy taxes on all transactions with non-Native Americans and a revision of the revenue-sharing agreement between the state and the KBIC to ensure that payments to the state will continue, even if Michigan authorizes additional gaming in the future.

Under the KBIC's current agreement, the tribe's revenue payments would stop if state-authorized gaming was expanded.

The tribe refused to discuss any of the issues Snyder raised, according to the letter.

Tuesday was the deadline for Snyder to act on the proposal, which was approved by the U.S. Department of the Interior in late 2011.

"After giving due consideration to all relevant factors, and in light of the Tribe's refusal to discuss any, even minor, issues that would make the proposed casino part of a more successful arrangement for all parties involved, the governor does not concur with the secretary's determination," the letter reads.

In the letter, Snyder also took aim at the tribe on a handful of other issues, citing "significant concerns with the tribe's conduct." The letter accuses the tribe of withholding required revenue sharing payments between 2005 and 2008 and of allowing businesses within reservation boundaries "to flout state public health and safety laws, including the state's smoking ban and food services licensing requirements."

Additionally, the letter claims the KBIC "violated tobacco statutes by selling untaxed and unstamped cigarettes to non-members" and "refused to properly collect use tax from non-members at tribal retail operations (including gas stations)."

A spokesman with the KBIC had no comment, but said the tribal council was preparing to meet to discuss Snyder's response to the tribe's request.